Wednesday, July 24, 2024

WazirX, India’s Largest Crypto Exchange to Relocate to Dubai Due to India’s Restrictive Crypto Tax Laws

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Local media reports that WazirX’s co-founders are moving to Dubai.Some team members continue to work remotely in Mumbai and Bengaluru.India’s heavy tax laws have been cited as the reason for the move.
WazirX, India’s largest crypto exchange, will relocate to Dubai as a direct result of the heavy taxation on the crypto market. Sources with inside knowledge told media outlet Business Today that co-founders Nischal Shetty and Siddharth Menon had decided to shift bases. WazirX continues to have an office in the cities of Mumbai and Bengaluru, as much of the team works remotely.

While there has been no official statement from the exchange, it appears that the change is indeed happening. India’s 30% crypto tax law came into effect on April 1, and it seems like the co-founders have made a quick decision. This is understandable, as the tax scheme can result in heavy losses for the company even in the short term.

The tax scheme has led to a significant drop in trading volume in the country, hurting all exchanges. In addition to the taxation rate, the government has said that losses cannot be offset against profits. Crypto mining is also taxable.

WazirX trading volume plummeting after April 1: Nomics
Nischal Shetty has been a prominent voice in the crypto space, especially within the country. He has spoken in the past about the laws and how they would affect the Indian ecosystem.

Day 70

Countries by blockchain investment

US: $11.1B
UK: $1.9B
Hong Kong: $1.7B
France $1.2B
Canada $1.2B
India: $430M

Regulatory uncertainty & banking issues have led to India losing out on first wave of investments

A few tweaks and India can rise to the top#BuildForCrypto

— Nischal (Shardeum) ⚡️ (@NischalShetty) April 12, 2022

Dubai is a much more crypto-friendly city, with one school even accepting tuition fees in bitcoin and ethereum starting from September 2022. Both FTX and Binance have received approval to operate in the region.

More Indian Crypto Companies May Follow WazirX
India’s 30% tax on crypto profits and 1% tax deducted at source drew strong criticism from the Indian crypto community. While they welcomed regulation, they chided the fact that crypto was being treated as gambling and the heavy taxation. Many believe that it would drive innovation and funding away from the Indian crypto space, which was growing rapidly.

That appears to be the case as WazirX seems to be leaving the country — and others may follow suit. Crypto companies in India are saying that it does not make it economically viable to do business in India in the wake of the new laws.

Statement by NPCI as on 7th April 2022. With reference to some recent media reports around the purchase of Cryptocurrencies using UPI, National Payments Corporation of India would like to clarify that we are not aware of any crypto exchange using UPI. Please see attached document pic.twitter.com/lGTcaSLKeC

— NPCI (@NPCI_NPCI) April 7, 2022

Coinbase, which has also shown a great deal of interest in the Indian subcontinent, has also run into a few problems. Shortly after saying that it would hire 1,000 new employees in the country, the country’s local payment providers stopped offering services to the platform, forcing users to go P2P.

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